EghtesadsOnline: Sunday marks the first offering of crude oil for export on Iran Energy Exchange (IRENEX) days before new US sanctions on petroleum sector take effect.

The country had made several attempts in the past to offer crude oil on the stock market in the past to involve the private sector and international buyers in the state-controlled oil sector -- the lifeblood of its economy.

Trump’s unilateral move to abandon the 2015 Iran nuclear deal has put it at odds with the other signatories to the deal, including Washington’s close European allies Britain, France and Germany, as well as Russia and China.

Washington plans to pursue a new series of sanctions due to go into effect Nov. 4 aimed at undermining Iran’s economy, according to Financial Tribune.

The new measure has been touted by senior officials in Tehran as an effective way to frustrate US ploys to "reduce Iran's oil export to zero."

The National Iranian Oil Company has said that all investors–both Iranian and foreign–can participate in the oil trade. The Financial Tribune interviewed Ali Hosseini, IRENEX managing director, to find out more about the trading mechanism.

Admitting that the measure was long overdue, he borrows from a Persian expression that broadly means: better late than never. The official understandably has high hopes for the success of the new form of oil trade.

Hosseini said the notice by the National Iranian Oil Company offering oil on the stock market was a turning point in Iran's key oil industry and its capital market and will be considered an achievement by future generations.

Donald Trump has demanded that the Organization of Petroleum Exporting Countries (OPEC) boost output to lower prices and Saudi Arabia seems keen to appease him, both because it strongly supports the Iran sanctions and because of growing international anger over the killing of Jamal Khashoggi, a prominent Saudi journalist, in the kingdom’s consulate in Istanbul on Oct.2..

Iran's Oil Minister Bijan Namdar Zangeneh has said that the Saudis will not be able to fill any possible gap left by Iran.

"The Six Five-Year Economic Development Plan and the approval by the heads of the three branches of government shows the importance of [establishing the oil bourse]," he said, adding that the country should not sit idly by while its regional rivals make progress in that area.

"IRENEX will draw on its maximum capability [to make the crude offering] as a success in collaboration with the NIOC," Hosseini added.

Trading Features

Offering crude oil would start at the weekend on a large scale on IRENEX with one million barrels of light crude oil to be offered on the day. The minimum volume of purchase will be 35,000 barrels.

"Buyers will first have to pay 10% of the value of the contract in cash if their bidding is accepted they will pay another 10% in cash so that 20% is paid in rial and the remaining in foreign currency," the official said.

NIOC is its notice of offer said only payment in euro, yuan and dirham will be accepted, now it has eased its rules to accept other major world currencies as well.

As per NIOC's announcement, the base price for crude at IRENEX will be $79.15 bpd. The place of delivery would be Kharg Island Oil Terminal off the Persian Gulf. Base prices are determined by Brent prices and the bench exchange rate will be announced on sanarate.ir, a website that records daily forex trade from across the domestic exchange bureaux.